User Account

All Pages

What is the total amount of financing used to finance

Assignment Help Finance Basics
Reference no: EM132544499

The last balance sheet of Lotus company is as follows  Assets: 

Current Assets: 20 000 000                

Long-Term Assets: 80 000 000 

Total Assets:  100 000 000 

Liability  and  Equity 

Account Payables: 4 000 000 

Accrued Expenses: 1 000 000 

Short-Term Loan:  15 000 000 

Long Term Loan:    50 000 000 

Equity as Common Stock: 30 000 000 

Total Liab.  and Equity: 100 000 000 

This firm do not have any outstanding preferred stocks. 

  1. What is the total amount of financing used to finance the assets of this firm?
  2. What is the weight of debt and  the weight of equity (common stock) in financing the assets of that firm?
  3. Assume that this firm has only one short term loan whose annual interest rate is 10%  and  only one long-term loan whose annual interest rate is 12%.  What is the cost of debt for that firm if the corporate tax rate is 20%?
  4. This firm uses dividend discount method to find the cost of equity. What is the cost of equity if the expected dividend next year is $3  per share, if the current market value of Lotus shares is $30 per share and if firm expects an annual growth rate of 5% in future dividends?
  5. What is the WACC (weighted average cost of capital)  fort hat firm?

Note:  You may use two or three decimals (e.g.  25.15) in your answers

Reference no: EM132544499

Questions Cloud

What is the annualised holding period yield : What is the annualised holding period yield for this financial security?
Explain the relationship between the number of years : Explain the relationship between the number of years until a bond matures and its price.
Leave for the wilderness 10 years : You plan on working for 10 years and then leaving for the Alaskan back country. You figure you can save $1,000 a year for the first 5 years and $2,000
BUMGT1501 Management Principles Assignment : BUMGT1501 Management Principles Assignment Help and Solution, Federation University - Assessment Writing Service - Case Study Analysis
What is the total amount of financing used to finance : What is the weight of debt and the weight of equity (common stock) in financing the assets of that firm?
Amount suggested by your finance lecturer : Your finance lecturer, suggests that you should have $1,500,000 in your retirement portfolio before you even THINK about retiring. Recently, you received
What real option is jim taking : Expecting the net present value (NPV) of the sale to be greater after the highway is built, he decides not to sell at this time. What real option is Jim taking?
Apparent market inefficiency in foreign exchange : What are the implications of the apparent market inefficiency in foreign exchange
What will these equal payments be : Emily Morrison purchased a new house for $750,000. She paid a $30,000 deposit and agreed to pay the rest over the next 25 year in 25 equal annual payments

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd